Question: 7. Forecasting mutual fund value Evaluating Mutual Fund Performance When buying a mutual fund, you might expect to earn money through (from increases in share

a mutual fund, you might expect to earn money through (from increases

in share price of from a given investment by determining the approximate

7. Forecasting mutual fund value Evaluating Mutual Fund Performance When buying a mutual fund, you might expect to earn money through (from increases in share price of from a given investment by determining the approximate yield. This (from dividends), ), or both. You can calculate your total earnings future current income are Investment options. future capital appreciation Using Approximate Yield with Mutual Funds The formula for approximate yleld of an investment can look intimidating, but it's just a function of three things: (1) dividends earned, (2) capital gains distributions received, and (3) change in share price. Based on the information in the table, compute the approximate yield for each of the two funds that follow 7. Forecasting mutual fund value Evaluating Mutual Fund Performance When buying a mutual fund, you might expect to earn money through (from dividends), (from increases in share price of the fund's underlying securities), or both. You can calculate your total earnings etermining the approximate yield. This value makes it easier to compare investment options. future capital appreciation future current income Using Approximate Yield with Mutual Funds The formula for approximate yield of an investment can look intimidating, but it's just a function of three things: (1) dividends earned, (2) capital gains distributions received, and (3) change in share price. Based on the information in the table, compute the approximate yield for each of the two funds that follow. Using Approximate Yield with Mutual Funds The formula for approximate yield of an investment can look intimidating, but it's just a function of three things: (1) dividends eamed, (2) capital gains distributions received, and (3) change in share price. Based on the information in the table, compute the approximate yield for each of the two funds that follow. Mutual Fund 1 Annual dividends and capital gains distributions $1.00 Mutual Fund 2 $2.70 $101 $125 $70 Beginning mutual fund share price Ending mutual fund share price $82 The approximate yield for Mutual Fund 1 is and the approximate yield for Mutual Fund 2 is True or False: If both investments carry the same rate of risk, Mutual Fund 2 is a better investment than Mutual Fund 1. True False

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